Navigant Research Blog

LEDs Light the Way to Lower Utility Bills

— December 21, 2015

With the holiday season upon us, residential and commercial buildings, trees, and yards are brightly lit with holiday lights. With decorating and purchasing new lights comes the decision to use traditional incandescent lights or LED alternatives.

Light Lifespans

While the upfront cost of LED holiday lights can be 2 to 3 times the initial cost of traditional miniature lights, there are significant benefits to LED lights. Incandescent lights last roughly 2,000 hours of use before failing, while LEDs can last for up to 20,000 hours. If you left your holiday lights on for 8 hours per day for 30 days, LEDs would theoretically last you 83 holiday seasons. While this number is extremely high and users will most likely not get this many uses from their LED lights, they still do have a much longer lifespan than incandescent lights. Duke Energy advertises that LEDs will last 10 years longer than regular incandescent lights, which is a more reasonable length of time to expect to use the same decorations, since other factors such as wiring can ruin a sting of lights before the bulb no longer functions.

Energy and Cost Savings

Beyond the extended lifespan of LEDs, the amount of energy used (and thus overall cost) is substantially less. Duke Energy’s Holiday Lighting Calculator allows users to calculate the amount of energy saved by switching to LEDs. For example, someone using five strands of 100-bulb mini-incandescent lights, two strands of C7 incandescent bulbs, and one strand of C9 incandescent bulbs for 6 hours per day would add $34.20 to their electric bill each month. On the other hand, someone using the same number of strands with LED lights would spend $4.23 each month. While the savings are clear in this example of what a residential customer might spend, this is a limited amount of lights compared to many decoration displays on residential buildings. Additionally, savings for retail clients are even greater, as the number of lights increases along with the average number of hours the lights are on.

If you’re interested in decreasing energy use even more, Anear sells Solar String Lights with an attached solar panel in 100-bulb strands. Energy from the solar panel is stored in the light string’s built-in nickel-metal hydride batteries, which provide up to 8-10 hours of power to the lights at night. These will only work for exterior decorations and the solar panel will need to have full sun exposure to maximize usage.

If the initial additional upfront cost is not an issue, LED holiday lights are a preferable choice. They are better for the environment, using 90% less energy than incandescent lights. They also decrease the added cost to your utility bill and are safer than incandescents—LEDs produce less heat than traditional bulbs, reducing the chance of a fire. With the cost of LEDs decreasing over the past few years and more holiday lighting choices available, more consumers are expected to reach for the LED option in the coming years. Enterprising shoppers should look for post-holiday sales in January and save even more in preparation for next year’s holiday season.


State-Regulated Energy Efficiency and Renewable Energy Use in California

— December 2, 2015

California’s newest energy bill, senate bill (SB) 350, passed 26 to 14 and was signed into law on October 7. The Clean Energy and Pollution Reduction Act of 2015 aims to increase the Renewable Portfolio Standard (RPS) to 50% by 2030 (up from the previous target of 33%), establishing that a percentage of electricity be generated by renewables and requiring an increase in energy efficiency in existing buildings by 50% by 2030. The bill originally proposed to cut petroleum use by 50% by 2030, but this was removed from the bill shortly before it was passed. The bill supports a previous order by Governor Edmund Brown reducing greenhouse gases by 40% below the 1990 levels by 2030.

According to the American Lung Association, the top five ozone and particle polluted cities in the United States, both year-round and short-term, are in California. Senator Kevin de León, the author of the bill, stated at the signing ceremony in Los Angeles that, “with SB 350, we are making clean power sources like wind and solar the mainstream, democratizing the benefits to our economy and environment. … Soon, those communities living in the shadows of smokestacks and freeway overpasses will breathe a little easier.” Funded by the Los Angeles Department of Water and Power, Pacific Gas and Electric Company, the Sacramento Municipal Utility District, San Diego Gas & Electric Company, and Southern California Edison Company, a study by Energy and Environmental Economics, Inc. concluded that achieving the 50% RPS set forth by SB 350, while aggressive, is feasible. The study found a number of short-term solutions, including increased regional coordination, increasing the diversity of renewable resources, and energy storage.

Impact on Utilities

Austin Whitman, Director of Regulatory Affairs for FirstFuel Software, stated that the benefits of SB 350 to utilities include an increase in data-driven improvements. Utilities will need to reduce demand hour-by-hour, not just on a yearly basis.

SB 350 requires the State Energy Resources Conservation and Development Commission to establish annual targets for energy efficiency savings, the California Public Utilities Commission to establish efficiency goals for private utilities, and the California Energy Commission to do so for municipal utilities. ReedSmith explained that while these commissions are required to set annual targets, the local, publicly owned electric utilities are required to set annual targets for energy savings and demand reduction. Utilities are encouraged to participate in cost-effective activities, such as peak load reduction. The bill is expected to transform the independent system operator (ISO), which is required to propose modifications to the states legislature for approval, in to a regional organization. The bill stresses the importance of the use transportation electrification (TE) and increase’s the state’s authority to direct investor-owned utilities to implement TE, which will likely create a plethora of new programs.

California as a Test Pilot

The regionalization of the ISO is intended to encourage the growth of regional electricity transmission markets in western states, which will increase access to customers within these areas. The ISO must conduct additional studies on the impacts of a regional market enabled by the proposed governance modifications. If the studies are found successful, it is likely this could be adapted with other states and even neighboring countries, as well.

California has continually been leading the country—and the world—in its efforts to fight climate change. A 50% RPS is the highest anywhere worldwide, and all eyes will be focused on California to see how these goals can be achieved by 2030.


Expanding Options of Community Solar

— November 6, 2015

In the United States, community solar (also known as shared solar or solar gardens) has been on the rise and is expected to be a 0.5 GW annual market by 2020, according to GTM Research. Over the next 2 years, community solar deployments are expected to increase sevenfold, with an estimated 399 MW installed cumulatively in 2015 and 2016.

Designed specifically for homes unfit to reap the benefits of rooftop solar, community solar provides an option to renters who would be otherwise unlikely to invest in the high prices of rooftop solar. In a community solar setup, customers lease or own solar panels in a community solar garden. The energy produced is transferred to the utility, which then applies solar credits to the customer’s electric bill on a monthly basis based on the customer’s total share of the solar array. However, even with the growth of community solar gardens and the increase in accessibility for users, the costs remain high and are not always affordable.

Annual U.S. Community Solar Installations, 2010-2020E

Krystal Blog Chart

(Source: GTM Research)

Making Community Solar Affordable for Everyone

GRID Alternatives, a non-profit headquartered in Oakland, California, works locally through 10 regional and affiliate offices in California, Colorado, the New York Tri-State Area, and the Mid-Atlantic, as well as internationally in Nicaragua. Grid Alternatives’ Colorado branch has developed the first solar garden in the United States exclusively for those with low or fixed incomes.

Utilities have partnered with Grid Alternatives’ Colorado for its community solar program, offering community solar to Colorado families at no out-of-pocket cost to the family. Requirements for the program’s participants include having a household income that is at or below 80% of an area’s median income and having residence within a utility service area that currently offers the program. Two solar gardens are listed on the company’s website. The first is a 29 kW array available to members of the Grand Valley Power service territory. The second (which lists panels as currently available) is 75 kW in size and is available to Xcel Energy customers who live in Jefferson County.

Other Opportunities

There are a number of programs that focus on making solar affordable for low-income families, but there is still room for growth in the low-income solar market. Unlike GRID Alternatives, most of these other organizations focus on rooftop solar, not community solar. The Renewable Energy and Electric Vehicle Association, for example, is a do-it-yourself organization that assists members in installing solar panels in an effort to cut the cost of labor. The Citizens Energy Solar Homes Program installs solar arrays on the roofs of low-income families in the Imperial Valley of California. Founded in January 2013, the Solar Homes Program provides the homeowner with a 20-year solar panel lease paid for by Citizens Energy, which, on average, saves the home owner 40%-50% of the cost of their electric bill.

Even with the number of programs that focus on bringing solar to low-income families, there is tremendous room for growth. The question remains if the rise of community solar will translate to an increase in solar opportunities for low-income families.


Market Players Split on Energy Efficiency Opt-Out Program Options

— August 31, 2015

Walmart and a group of large energy users within Florida have proposed an opt-out option to Florida’s Energy Efficiency and Conservation Act. The proposal would allow these large companies to opt out of paying the energy conservation charge. This action would separate these payments and the demand-side management programs, which are both part of the Energy Efficiency and Conservation Act. As the Orlando Sentinel reports, Kenneth Baker, a senior manager at Walmart, stated: “We tend to pay into the rebate program … much higher numbers than we get back in rebates. I think that some of the money that we’re now spending on rebates could go towards other energy-efficiency measures.” Walmart is arguing it would have a better impact on energy efficiency measures if it were allowed to take control of these programs—and not be confined by the Energy Efficiency and Conservation Act.

Opt-out options of similar programs have been implemented in other states, with an Opt-Out Eligibility put forth by the utility and approved by the utilities commission. In order to opt out of the program in North Carolina, for example, a company must implement alternative energy efficiency measures.

The states that do not offer self direct and opt-out programs include Alabama, Alaska, California, Connecticut, Delaware, Washington, D.C., Florida, Georgia, and Hawaii. In Texas, clients develop their own energy efficiency plans if desired and are responsible for the financial impact associated with them. While self direct and opt-out programs have been implemented in other states, there is little information on the successes and failures of such programs.


According to Energy Manager Today, Duke, Florida Power & Light (FPL), Tampa Electric, and Gulf Power all oppose the proposal. Their arguments against the proposal are increased costs to small businesses and residential customers. All businesses and residents have the potential to benefit from the programs via the lowering of utility rates, which would be limited if the proposal passed. According to the Tampa Bay Times, FPL argued, “The proposals are self-serving and discriminatory because the thresholds would benefit only select customers.” It would be a detriment to small businesses and residential customers to allow Walmart and other large companies to opt-out of energy efficiency programs. There are no regulations stopping large energy users from investing in additional energy efficiency programs on their own.

If the Public Service Commission in Florida agrees to allow Walmart and other large energy clients to opt out, it seems likely they would provide a self direct program as an alternative, which is common in many other states. While the self direct programs require these companies to provide their own energy efficiency programs, this still leaves the issue of higher costs to small businesses and residential clients who do not qualify to opt out.

The commission is waiting for staff recommendations before making its decision, which will most likely happen in September.


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